Staff Reporter
…….marking the re-emergency of offshore lines of credit
The European Investment Bank (EIB) has agreed to support new long-term financing for entrepreneurs and businesses across Zimbabwe in cooperation with CABS with EUR 15 million to alleviate consequences of Covid-19 pandemic.
The first ever partnership between the EIB, the world’s largest international public bank and CABS, will extend loan tenors and increase access to USD by businesses in the country as the new dispensation continue to engage and re-engage.
This is the first EIB engagement in Zimbabwe in 22 years. The EIB financed energy, water telecom and industrial investment in Zimbabwe between 1982 and 1999.
Several local businesses have been severely affected especially those in service industries such as accommodation, food and educational services that were affected by changed customer behaviour especially the physical distancing and mandated operational restrictions that began during the pandemic.
The new private sector financing will help companies most impacted by COVID-19 and is part of the EIB’s rapid response across Africa to strengthen economic resilience to the pandemic.
The new EIB – CABS cooperation to support business investment in Zimbabwe was formally announced by Managing Director of CABS Mehluli Mpofu, during a virtual ceremony in Harare recently, the meeting was attended by, European Investment Bank Vice President Thomas Ostros, EU Ambassador Timo Olkkonen and new EIB regional representative for southern Africa Jim Hodges.
“Companies and communities across Zimbabwe have been impacted by the COVID-19 pandemic. CABS is committed to supporting private sector investment in Zimbabwe and enabling our corporate, business and agricultural clients to invest for the future and create economic opportunities. The new EUR 15 million European Investment Bank backing for CABS will unlock new private sector financing to be provided by our branches across the country to private businesses.
“The close cooperation between CABS and EIB financial experts over recent months will transform access to longer term loans in foreign currency essential for Zimbabwean businesses to grow during challenging times and ensure that Zimbabwe benefits from the EIB’s rapid response to strengthen economic resilience to COVID across Africa.” said Mehluli Mpofu.
“The new financing will allow longer average loan tenors for business loans and enable companies to better reflect the economic life of new investment.
Under the initiative, CABS will provide financing in USD to eligible private sector clients across the country.
Economic analysts noted that this is an exciting opportunity for the youths whose businesses were affected by Covid-19 related challenges to apply for the loans, especially those in the agriculture and technology sectors. They however challenged the EU to consider removing economic sanctions imposed on Zimbabwe so that exporting becomes easier and in the processes generating the much needed foreign currency. The development could signal a boon for the economy and the re-opening of off-shore lines of credit critical for pre and post shipment finance.
The European Investment Bank is the world’s largest international public bank, owned directly by the 27 European Union member states. Last year the EIB provided more than EUR 4.7 billion for private and public investment across Africa.
